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Draft Stimulus Plan Has Billions for Smart Grid

Jeff St. John: January 15, 2009, 3:04 PM
President-elect Barack Obama promised that his massive stimulus plan would include big money for "smart grid" technologies — and his transition team and House Democrats are keeping the bargain. Details released Thursday of a draft stimulus bill aimed at pumping $825 billion in tax cuts and spending into the flagging economy includes a big chunk — $32 billion — aimed at improving the nation's transmission grid. Of that, $4.5 billion is directed specifically at grants for projects that enable utilities and their customers to track and manage the flow of energy more effectively, curb peak demand, reduce blackouts and integrate renewable energy and storage (including electric and plug-in hybrid vehicle batteries) into the grid. That's likely good news for the host companies in the smart grid realm — smart meter makers like ItronSensus and Landis+Gyr, demand-response providers like EnerNOCand Comverge and smart grid communications and networking providers like GridpointGrid Net and SmartSynch, among others. That $4.5 billion is in the form of 50-percent matching grants for a series of regional demonstration projects, as well as regular smart grid investments, said Eric Miller, chief solutions officer at Trilliant, a smart grid communications and networking company. "That's a nice bump," he said, since it implies support for up to $11 billion in smart grid investments. (Estimates for how much money it would take to bring the smart grid to nationwide reality range from $50 billion to $65 billion, according to the Edison Electric Institute). Of course, this being a draft bill, those numbers could change, Miller warned. And he's hoping that the U.S. Department of Energy review and selection process set up to administer the grant program gets up to speed quickly. "The legislation pledges to have the process in place in 90 days, so its not terrible," he said. But the emphasis on building smart grid infrastructure also shows that Congress and the incoming Obama administration are serious about funding "shovel-ready infrastructure projects that can help create what people call green-collar jobs," said Eric Dresselhuys, a vice president at Silver Spring Networks, a fellow smart grid communications and networking startup. Matching grants could also help utilities struggling with making an economic case for smart grid investments, he added. "In a lot of states, the regulators have been slow to get these projects approved," he said. While many smart grid investments can pay for themselves, there are added environmental benefits "that are hard for utilities to capture." Miller noted other aspects of the $32 billion incentive package that could help the smart grid become a reality, such as research incentives. Smart grid companies haven't gotten everything they want from the stimulus bill, of course. So far, it doesn't include a request by the Demand Response Smart Grid Coalition trade group in November for tax credits for technologies that reduce power consumption (see Smart Grid Coalition Seeks Tax Breaks for Negawatts). And both Miller and Dresselhuys said they're waiting for language that insists that smart grid deployments include open communication standards to ensure interoperability across different systems. Smart grid wasn't the only green technology getting a piece of the stimulus pie. The draft bill also included $20 billion in tax cuts for renewable energy providers and tax credits for research and development in renewables, energy conservation and energy efficiency. Another $6 billion is to weatherize low and moderate-income homes.

Big Hoopla Over Climate Change Proposal by Big Business and Environmental Groups

Ucilia Wang: January 15, 2009, 2:45 PM

The climate change policy debate is heating up as nicely as the Earth’s surface temperatures.

The U.S. Climate Action Partnership (USCAP), a consortium of big businesses and environmental groups, on Thursday unveiled its recommendations on what Congress and the new White House should include in a climate change bill. The proposal, which took two years to conceive, outlines what a carbon emissions cap-and-trade system should look like, including targets for reducing greenhouse gas emissions over time.

Plenty of special interest groups have offered their takes on what the legislation should include, including one presented by an industry group for electric utilities yesterday. But the proposal by the USCAP seems to have drawn a lot more attention (criticism) from politicians and environmental groups, noted the WSJ's Environmental Capital blog.

Jim Rogers, CEO of Duke Energy in Charlotte, N.C., helped to present the USCAP’s proposal before the House Energy and Commerce Committee hearing.

The Republicans on the committee were miffed that they were given little time to review the USCAP proposal before the hearing, the first held by the new committee chairman, Henry Waxman of California. The Republicans also don’t like the cap-and-trade program to begin with.

A cap-and-trade program would (ideally) set strict emission limits and requires any polluters that can’t meet the emission requirements to buy credits from those that pollute much less than allowed. The European Union has run a cap-and-trade program since 2005.

The goal of a cap-and-trade is to nudge companies into cutting emissions, or else they will have to pay. They might have to pay to get those credits in the first place, something that Barack Obama has advocated during the election campaign (in Europe, companies get their first allowances mostly for free, although that might change). Some critics say a cap-and-trade system would be too costly for businesses, especially during an economic downturn.

Obama wants to use the cap-and-trade program to raise billions of dollars over time to pay for a variety of initiatives, including greentech research and business developments.

The USCAP wants the government to give away a big portion of the emission allowances for free, and that doesn’t sound right for some lawmakers and environmental groups. Its schedule for reducing emissions over time also drew ire from groups such as the Union for Concerned Scientists, which wants to see tougher targets.

Better Place: So Who Pays for These Charging Stations and Where Will They Go?

Michael Kanellos: January 15, 2009, 11:04 AM
Amid the whirlwind global tour of Better Place CEO Shai Agassi, there's a question that doesn't get as much attention as you think it might. Namely, who is going to pay for these electric charging stations the company wants to erect in Australia, Canada, the U.S. Israel and Denmark? (Apologies for anyone I left out.) The plan to bring them to the Bay Area, for instance, could cost $1 billion. The answer is private equity. "Better Place is working with Macquarie Capital as a trusted financial adviser with recognized infrastructure expertise. Macquarie already is a Better Place partner in Australia and they are committed to helping raise private funds to support the plan to build charging network infrastructure in Ontario," wrote a spokeswoman. How well this will work in the current environment remains to be seen. Credit is tight. The plug-in car market will also likely evolve slowly -- it will take several years to convert even a portion of the stock of existing cars into electrics -- so return on investment could be slow. On the other hand, plug-in cars sound like they will become a reality. Thus, if you're going to put money into something for the long term, charging stations are less wacky than many other options. One can imagine the company seeking out public funds. Who isn't after all? The company is also considering installing charging stations at filling stations. It makes sense: They already exist. Customers could drop their car off and go off to work. At the end of the day, they could pick it up, along with a a 64-ounce Diet Coke, a couple of tree air fresheners and some pepperoni Slim Jims. Nothing like a little Christmas shopping at the gas station. Interestingly, readers have pointed out that in Hawaii, most of the electricity is produced from diesel generators. Thus, the electric charging stations erected there will really function more like gas stations.

Scoop: Solyndra’s Chief Scientist Moves to First Solar

Michael Kanellos: January 15, 2009, 9:05 AM

Markus Beck, the chief scientist at Solyndra, has defected to thin-film solar giant First Solar, according to sources.

The loss of Beck is a major loss for Solyndra, according to solar execs who heard about the switch. As chief scientist, Beck oversaw projects for improving the efficiency and performance of the company’s unusual, cylindrical copper, indium gallium selenide (CIGS) solar cells. His name is on various Solyndra patents.

“Beck was truly the key technical solar guy over there,??? wrote one solar exec.

Both Solyndra and First Solar have not returned calls for comment. Beck, however, has arleady started at First Solar, say sources.

More soon.

Rocky Mountain Institute Spins Off a Car Company: Bright Automotive

Michael Kanellos: January 15, 2009, 8:48 AM
The Rocky Mountain Institute, the think tank that has played a central role in transforming green technology and energy efficiency from a fringe pursuit to a central pillar in industrial and national planning, has spun out a car company. Bright Automotive wants to make plug-in hybrids. The cars will go about 30 miles on a charge and 400 miles or so in all with the help from the gas generator. Overall, the cars will get 100 miles an gallon. The cars will be street and freeway legal. Right now, most of the electric and plug-in cars produced (from companies like Zenn Motors and Miles Automotive) are "limited range, limited speed" vehicles, i.e., they have governors on them that prevent them going faster than 25 or 35 miles per hour. Coming out with a general purpose, economical plug-in has become a goal for companies like Zenn, Miles and Bright, but also General Motors and pretty much every other major car companies except for a few real big diesel fans like Audi. RMI spun the company out in January. It is run by John Waters. He's not the director of "Female Trouble" and "Hairspray." He's a longtime automotive and battery exec. He designed the battery for the EV1 actually, the ill-fated General Motors electric car. Bright will show off its car later this year and try to come to market fairly rapidly.

Daimler Clarifies Its Deal to Buy Batteries From Tesla

Ucilia Wang: January 15, 2009, 8:37 AM

Is the Tesla Motors deal just an interim solution for Daimler until the Germany car maker can start getting lithium-ion battery packs from its joint venture with Evonik?

That was what it sounded like in a post on Green Car Congress yesterday where Daimler’s spokesman Matthias Brock said this:

"he agreement with Tesla "helps us to bridge the time until the industrialization of lithium-ion batteries within our joint venture with Evonik will be ready," Brock told Green Car Congress.

Brock’s comment cast a different light to the Tesla announcement by CEO Elon Musk, who described the deal more as the beginning of a beautiful relationship. Musk said his San Carlos, Calif.-based company will build battery packs and chargers for about 1,000 Daimler’s all-electric Smart cars, and the deal could expand if all goes well.

I asked Brock about his comment, and he emailed me back today to say, “We are promoting the industrialization of li-ion batteries in our joint venture with Evonik in parallel. This doesn’t exclude further agreements with Tesla Motors.???

It makes sense for Daimler to rely more heavily if not exclusively on the battery packs that will be produced by the joint venture. The company announced the joint venture last December, and it holds a 90 percent share of the joint venture. In fact, Daimler said back then that it would like to eventually sell battery cells and systems to other companies as well.

Heck, Daimler could be selling battery cells to Tesla. Musk told Reuters this week that he would consider buying from Evonik if Evonik makes better products.

Tesla is currently selling its $109,000 Roadsters, and plans to begin shipping its second electric car mode, the Model S, in 2011. The company recently had trouble raising the necessary money to build Model S, so finding new ways to generate revenues is critical for the company's survival. Tesla's spokeswoman Rachel Konrad said the company is actively looking to sell its powertrain technology.

Boston-Power’s Battery Technology to Boost HP PCs

Eric Lane: January 15, 2009, 3:00 AM
Boston-Power, a Massachusetts advanced battery company, makes lithium-ion batteries that charge faster and last longer than conventional lithium-ion batteries. Last month, Boston-Power announced that Hewlett-Packard (HP) would be its first customer and would offer its Sonata battery as an upgrade option in select HP notebook PCs in early 2009.  (see the greentechmedia piece here and the New York Times article here) Boston-Power owns several U.S. patent applications covering its battery technology, including U.S. Application Pub. Nos. 2008/0008928 (’928 application) and 2008/0008933 (’933 application). Conventional lithium-ion batteries have a cathode (an electrode that circulates electrons) made of lithium cobalt.  The ‘933 application is directed to a blend of two or more different types of cathode materials in the positive electrode which enables manufacturing of larger cells than conventional lithium-ion batteries that use lithium cobalt alone. According to the ‘933 application, increasing capacity through these larger cells is a better solution than increasing the number of cells, which raises the probability of over-charge or over-discharge. The ‘928 application is directed to a battery integrated with a current interrupt device (CID).  When lithium-ion batteries are improperly charged, exposed to high temperatures, or are short circuited, they may produce gas, and the pressure increase can be dangerous. CIDs protect against excessive internal pressure increases in batteries by interrupting the current path when pressure increases.  However, according to the ‘928 application, CIDs incorporated within batteries take a lot of space and limit battery capacity. The invention of the ‘928 application is a battery in which at least a portion of the CID (28) may be located external to the battery can (21) because the CID is in electrical communication with the battery can.  Specifically, at least one of the cell casing (22) and the lid (24) of the battery can (21) are in electrical communication with the second electrode (14) of the battery (10) through the CID (28). Boston-Power’s technology provides significant advantages over the competition.  According to the greentech media article, Boston-Power’s batteries take a half hour to charge to 80 percent capacity, instead of two hours for an ordinary battery. Also, the batteries can last about 1,000 charging cycles (i.e., three years), before the charging capacity becomes substantially diminished, whereas conventional lithium-ion batteries go about 300 cycles or fewer.  As a result, HP will provide a three-year warranty with the Sonata battery. Eric Lane is a patent attorney and intellectual property lawyer at Luce, Forward, Hamilton & Scripps in San Diego, where he is in the Intellectual Property and Climate Change & Clean Technology practices.  Eric is the founder and author of Green Patent Blog, which provides discussion and analysis of intellectual property law issues in clean technology.